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Sri Lanka Tea Production – January to October 2018

Sri Lanka tea production in the month of October 2018 reached 23.8 million kg, compared to 25.7 million kg in the same month in 2017 reflecting a decline of 1.9 million kg or by 7.4%.

The declining trend in tea production reflected in the cumulative tea production figures from January to October 2018 period as well. As per SLTB data Sri Lanka has produced 247.1 million kg of tea in the first ten months of the year as against 258.8 million kg achieved during the corresponding period of 2017. This reflects a decrease of 11.7 million kg or 4.5% in the total tea production up to October 2018. Based on the available information, it is estimated that the yearend tea crop would be around 300 – 310 million kg.

The decline in tea crop has registered in all three elevations and also in orthodox and green tea categories as well. Only CTC tea production has increased during the period under review by 1.3 million kg or by 7.4%. The summary of tea production for the January to October 2018 is appended below

ELEVATION

QUANTITY (MT)

HIGH

48,993

MEDIUM

37,448

LOW

158,517

GREEN

2,153

TOTAL

247,111

Sri Lanka Tea Exports – January to October 2018

Sri Lanka tea exports in the month of October 2018 amounted to 23.3 million kg against the volume of 25.5 million kg registered in the same month of 2017.

The cumulative tea exports during January to October 2018 period amounted to 235.6 million kg compared to 241.3 million kg registered in the corresponding period of 2017. The decrease in tea crop in the country and unfavorable situation in some of the key tea importing countries would have been the main reasons for decline in tea exports during the first ten months of 2018. The declining trend has reflected in bulk, packets and tea bag categories while instant tea and green tea exports have shown some improvements.

With the drop in export volume, the export revenue too has come down. The total tea export revenue realized during the first ten months of the year was Rs. 192.4 billion, a drop of Rs. 1.9 billion compared to revenue of Rs. 194.3 billion achieved during the same period of last year. However, the FOB price of Rs. 816.43 per kg realized during the first ten months of 2018 shows a gain of Rs. 11.00 per kg.

Among the major buyers of Ceylon Tea in the first ten months of 2018, Iraq has maintained her position as the largest buyer followed by Turkey, Russia and Iran. The respective tea exports data for the first ten months of 2018 are appended below.

DESCRIPTION

QUANTITY (MT)

Tea In Bulk

102,164

Tea In Packets

109,472

Tea In Bags

18,104

Instant Tea

2,094

Green Tea

3,856

TOTAL

235,690

MAJOR IMPORTERS OF SRI LANKA TEA - JANUARY / OCTOBER 2018

COUNTRY

VOLUME (MT)

IRAQ

32,979

TURKEY

29,708

RUSSIA

25,978

IRAN

20,196

LIBYA

9,449

U.A.E.

9,411

AZERBAIJAIN

8,645

SYRIA

8,486

CHINA

8,466

CHILE

6,535

Tea Production & Exports – 2017

The Sri Lanka tea production reached 307.08 million kg in year 2017 registering a growth rate of 4.9% over the tea crop of 292.50 million kg registered in 2016. The category wise review reveals that, production of orthodox tea recorded a moderate growth rate of 4% while CTC and Green tea segments registering significant growth rates of 16.6% and 13% respectively over the previous year’s volumes. In terms of elevation wise, tea production in medium grown and low grown regions recorded growth rates of 2.6% and 7.4% respectively while the tea crop in high grown region suffered a marginal decrease of 0.73% last year. The ban on use of Glyphosate since 2015 may have negatively impacted on the tea production in high grown region as large plantations were left without any alternate weedicide.

The tea exports of the country however, remain almost at the same level and registered 288.90 million kg last year as against the volume of 288.70 million kg recorded in the previous year. The category wise tea exports figures reveal that export of tea in bags has declined from 23.0 million kg to 21.7 million kg over 2016 – 2017 periods. This reflects a drop of 1.3 million kg or 5.69% when compared to 2016. Though the volume is comparatively small, the green tea volume has registered a growth rate of 18.9% or 0.80 million kg in 2017. The export of tea in bulk form and tea in packets has remained almost unchanged.

Despite Sri Lanka tea export volume has remain almost unchanged in 2017 , the revenue earned has moved up to Rs. 233.3 billion last year compared to Rs. 184.07 billion earned in 2016 registering a growth of Rs. 48.6 billion or by 26.3%. It is reported that, this is the highest ever revenue achieved from tea exports in terms of local currency improving the previous best of Rs. 212.5 billion in 2014. However, in terms of USD, the total tea export revenue recorded at USD 1.53 billion last year. The average FOB price recorded for export of tea in 2017 was Rs. 807.44 per kg, a gain of Rs. 167.56 per kg as against the Rs. 639.88 per kg registered in 2016. The shortfall in tea crop in Sri Lanka and also the shortage of black tea in the world market kept tea prices strong for the second consecutive year, the major reason for higher FOB prices and increase in tea export revenue.

Turkey emerged as the leading buyer of Ceylon Tea in 2017 with a volume of 37.8 million kg followed by Iraq (35.0 million kg). Russia who has been the major buyer of Ceylon Tea for many years was in the third place with a volume of 33.3 million kg and Iran was the 4th largest buyer with a volume of 27.4 million kg. The top ten largest buyers of Sri Lanka tea during 2017 are listed below (in MT).